WASHINGTON -
Credit restrictions have recently slowed overall investment activity, the NAR said.
“Although vacancy rates remain relatively low for all sectors, they are expected to rise slightly in the office and industrial markets during the coming year because much of the space being absorbed is in high-quality buildings or is built-to-suit,” said NAR Chief Economist Lawrence Yun. “Vacancy rates in the retail and multifamily sectors are projected to tighten in 2008 with rents rising in all sectors.”
Yun added the credit crunch affected the market over the last few months of 2007, but 2007 nevertheless was a record for commercial real estate investment.
Multifamily vacancy rates are projected to average 5.4 % in the current quarter, the NAR is projecting, down from 5.9% in the fourth quarter of last year, and then continue to decline to 5.1% by the end of 2008. The NAR is projecting that average rent will rise 3.1% for 2007 and 3.8% next year, following a 4.1% increase in 2006.
